Wine Industry Contract Terms and Pricing

The Australian Competition and Consumer Commission is exploring a mandatory code for the wine industry, focusing on fair market prices and compliance. The concept of fair market price aims to improve market efficiency, but its determination poses challenges due to mixed responses on the previous indicative price. The Commission acknowledges the difficulty in enforcing a fair market price and recognises the need for clear qualifying criteria. Deputy Chair Mick Keogh suggested that mandatory price reporting, as seen in the US and EU, could be beneficial. Senator Peter Whish-Wilson proposed that the department could publish aggregated market information to improve efficiency without compromising commercial confidentiality. The discussion also covered the complexity of the spot price for bulk wine, with Senator Whish-Wilson highlighting the potential for inefficiencies. The lack of transparency in the spot price mechanism was noted, with Deputy Chair Mick Keogh admitting limited knowledge on the topic. Furthermore, Senator Whish-Wilson raised concerns about Accolade Wines' negotiations to buy out wine growing areas and its potential impact on the industry's long-term sustainability. The government has announced plans to amend the Australian Consumer Law to ban unfair trading practices, which may address certain practices in the wine and grape industry. The Commission believes this amendment would provide a more effective mechanism for regulating unfair practices. Additionally, the department has developed a grape price indicator dashboard to provide a summary of key drivers of grape and wine grape prices. Senator Whish-Wilson suggested updating the dashboard at key times to make it a more useful tool for the industry.